Landlords enjoy increase in gross yields during Q3

The private rented sector has been kind to landlords in recent years, and it seems like the blossoming relationship is set to continue.

That's because the latest figures released by Mortgages for Businesses have revealed that gross yields on buy-to-let properties increased over the course of the third quarter, partly due to a fall in the cost of acquiring new assets.

According to the statistics, returns on vanilla properties rose from 6.1 per cent in Q2 to 6.7 per cent in Q3, while the value of such investments declined by three per cent as investors continued to cash in on the lettings game.

And it was good news for landlords whose portfolios include houses in multiple occupation, too, as yields in this area jumped from 9.2 per cent to reach an impressive 11.1 per cent in the third quarter.

David Whittaker, managing director of Mortgages for Business, said: "The owner occupier market is sinking deeper into the mire, and is dragging property prices down with it. It is great news for buy to let investors.

Despite fears that rising rent prices could damage the private rented sector and deter prospective tenants, demand remains high as buying property continues to be an unaffordable option for many Brits.

So as current trends in the buy-to-let market look set to hold strong, it's likely that existing and aspiring landlords will have their eyes peeled in the search for potential investment opportunities.

But even though rising yields means that conditions are favourable for those who are thinking of expanding portfolios, it's vital that investors protect their financial interests and avoid the risks posed by unexpected costs.